The Summers-for-Treasury rumors are a good chance to draw attention to an incredible, but little-known story: how a gang of Harvard professors stole vast sums from Russia and escaped any form of punishment. The full, incredible story was published in Institutional Investor Magazine, but here's the summary:

In 1991, Lawrence Summers was on leave from Harvard (where he was an economics professor) to be chief economist for the World Bank. As the Soviet Union collapsed, he had the US send his protegé, Andrei Shleifer, to teach Russia about privatization. And Shleifer did -- US-style: he privatized Russia right into his pocket.

As Shleifer helped Russia sell off its telephone, oil, gas, and aluminum companies, he and his wife bought up the shares (concealing the transactions by putting them in the names of relatives). He appointed his students to run the organizations selling off the stock, where they instructed their staff to give Shleifer and his friends "the best service."

It was a crazy time -- Shleifer and his staffers used US government money to knock off work and play tennis, hire cars to drive their girlfriends around, and make documentaries about themselves. (When one of the people involved begun raising questions about such things, he was told he wasn't "with the program" and was being "too Western and inflexible". Shleifer fired him.)

Summers consulted with Shleifer and his wife throughout -- they used to walk on the beach together outside their vacation homes in Cape Cod. Summers warned them to be careful: "People might want to make Andrei a problem some day. The world's a shitty place."

People did. The US government sued Harvard, Shleifer, and friends for $120 million. As the case wound its way through the courts, Shleifer and his wife campaigned to get Summers made Harvard's president. They succeeded, and after Shleifer was convicted, Summers had Harvard pay $31 million to make the charges go away. Summers also made sure that Shleifer wasn't punished by Harvard.

So that's Lawrence Summers for you: letting his friends use US government money to loot Russia, then using Harvard money to make sure they aren't punished for it.